Wave of labour disputes hits South Africa
August 22, 2013, 10:14 pm

Zuma urged all parties to work on peaceful wage negotiations [BRICS5]

A new wave of strikes looming over the gold and construction industries in South Africa has already bit into the rand currency’s value and could create instability in domestic and international gold markets.

The economy first took a hit when some 30,000 automotive industry workers walked off their jobs in protest against low wages on August 19. The automotive industry, currently home to major companies such as Toyota, Nissan and Volkswagen among others, produces nearly 280,000 vehicles a year and accounts for six per cent of the country’s economy.

In the latest labour dispute, wage negotiations between the National Union of Mineworkers (NUM) – which represents more than 60 per cent of the 140,000 gold workers – and their employer companies broke down despite appeals from South African President Jacob Zuma for peaceful wage negotiations.

Negotiations between NUM, which also represents 90,000 construction workers, and their employers also seem to have faltered.

On Thursday, the Commission for Conciliation, Mediation and Arbitration (CCMA) issued certificates of non-resolution in both negotiations.

The increasing eagerness of the strikes demanding higher wages has been a thorn in Zuma’s side for the past two years and could pose a threat to his African National Congress (ANC) at the ballot box next year.

Many of the workers, who struggle to make ends meet, believe that since the end of Apartheid successive governments have been more focused on the affluent elite.

Such beliefs have emboldened the strike movements.

NUM has already notified construction company employers, represented by the South African Federation of Civil Engineering Contractors (SAFCEC), of its intention to begin a strike action on Monday, the union said.

The union, which represents more than 90,000 workers, said it would organize a march on Sunday to the electricity parastatal Eskom, the Chamber of Mines and SAFCEC to present memoranda of demands.

The march would be followed by a strike involving over 140,000 workers the next day. Companies such as WBHO, Group Five, Murray & Roberts, AVENG, Grinaker LTA will be affected.

The NUM will also consult with workers in the gold industry (which produces South Africa’s main mineral export) on the result of the negotiations with the Chamber of Mines.

The Chamber of Mines had earlier offered a six percent wage hike, which fell short of the workers’ 60 per cent increase demand.

Kevin Lings, chief economist at Stanlib, told Reuters that more strikes would frighten away potential investors and increase the cost of international borrowing for South Africa, if they led to further credit downgrades.

“Overall, it has already done South Africa quite significant damage and obviously ongoing strike action will continue to undermine the ability of South Africa to prosper,” he told Reuters.

The 85,000-member SACTWU textile workers’ union is also considering a strike over low wages.

57 founding members, many of them prominent US allies, will sign into creation the China-led Asian Infrastructure Investment Bank on Monday, the first major global financial instrument independent from the Bretton Woods system.

Representatives of the countries will meet in Beijing on Monday to sign an agreement of the bank, the Chinese Foreign Ministry said on Thursday. All the five BRICS countries are also joining the new infrastructure investment bank.

The agreement on the $100 billion AIIB will then have to be ratified by the parliaments of the founding members, Chinese Foreign Ministry spokesman Lu Kang said at a daily press briefing in Beijing.

The AIIB is also the first major multilateral development bank in a generation that provides an avenue for China to strengthen its presence in the world’s fastest-growing region.